Migrant workers left high and dry when companies go under

Vanguard July 2013 p. 5
Ned K.

 

At the same time as Ford announced closure of its production plants in Victoria and the direct loss of 1200 jobs, a major contractor in the property services industry, Swan Services, went belly up.

2,500 workers, mainly contract cleaners were affected. Most picked up work with the contractors that the property owners have used to replace Swan to provide the same services. However, these workers have to start all over again regarding accrual of annual leave and sick leave.

Even that presumes the new contractor offers them permanent jobs rather than casual work. With their previous employer going broke, they are left being owed unpaid wages, leave entitlements and redundancy pay.

It was actually the Howard Government that brought in a government scheme to pay minimum entitlements to workers in this situation. Labor continued and improved this scheme somewhat and now call it the Fair Entitlement Guarantee (FEG).

Once a company is put in to liquidation workers can claim award severance pay, annual and long service leave entitlements and any unpaid wages in the last 3 months of employment with the employer that went broke.

The hidden catch

Problem is, this FEG scheme only applies to Australian citizens and permanent residents.

The majority of workers in property services jobs like cleaning and security in the cities employed by companies like Swan Services are either migrant workers hanging on for  permanent residency qualification or overseas students.

Most of these workers are from non-English speaking background countries. So there is an element of racism as well in the FEG scheme coverage. These workers pay taxes, but cannot access a safety net scheme funded by taxation revenue.

The parliament knows about this situation, but nothing has been done to change it. The rich property owners are partly responsible for Swan’s demise because they award contracts to the cheapest bidder who is then unable to pay for the service those same property owners require.

It is downhill for the workers from then on. The migrant workers and overseas students can see this and are demanding that the property owners and the government sort it out so that their lost wages and entitlements are paid.

With an increasing trend to contracting out of services by governments and big business in many industries, the likelihood of contractor companies going broke will increase in the race to the bottom to win contracts. This trend is already seeing some of the most vulnerable migrant sections of the working class being drawn in to  struggle in what they hoped to be the ‘lucky country’.